A planned gift is any major gift made during a donor’s lifetime, or at death, as part of the donor’s overall financial planning, estate planning or both. In most cases, planned gifts enable donors to receive specific tax benefits during their lifetime and enable them to make a more significant gift than might otherwise have been possible.
Planned gifts can be funded with cash, equity, or property. Although such charitable donations are arranged during a donor’s lifetime, the actual gift is generally not available to the charity or non-profit until sometime in the future.
Planned gifts can be revocable or irrevocable. A revocable gift is a charitable bequest in a donor’s Will that allows the donor to make changes to the gift at any time. Irrevocable planned gifts, however, are often more attractive because they are deferred. A donor can choose to gift an asset today, but the actual transfer of the asset to the charity or non-profit is delayed, usually until after the donor’s lifetime. Thankfully, the donor is able to receive benefits from the gift during his or her lifetime.
If you are a philanthropic individual, making a specific gift also allows you to support the work of your favorite non-profits and charities.
Three major types of Planned Gifts to choose from are:
1. Outright gifts that use appreciated assets as a substitute for cash.
Common types of outright gifts include cash, check, credit card, securities and personal assets. Donors can also contribute appreciated property, like securities or real estate, receive a charitable deduction and pay no capital gains tax on the transfer.
2. Gifts that return income or other financial benefits to the donor in return for a contribution.
For example, charitable gift annuities make fixed payments, starting either when the gift is made (an immediate payment gift annuity) or at a later date (a deferred or flexible gift annuity). Charitable remainder unitrusts and annuity trusts are individually managed trusts that pay the beneficiaries either a fixed percentage of trust income or a fixed dollar amount.
3. Gifts payable upon the donor’s death.
An example of this type of gift is a bequest, or a beneficiary designation in a life insurance policy or retirement account. Although gifts like these do not generate a lifetime income tax deduction for the donor, they are exempt from estate tax.
So, some planned gifts can provide a lifelong income to the donor; other planned gifts use estate and tax planning techniques to provide for charity and other heirs in ways that maximize the gift and minimize its impact on the donor’s estate.
And, if you think it feels good to give, it may feel even better when that giving helps your wallet, too. American Bible Society offers several planned gift options that provide lifetime income to its donors.
Since 1843, one of our most popular planned gifts has been a Charitable Gift Annuity. A donor can fund a gift annuity with cash, certificates of deposit, withdrawal from a donor’s IRA account and stocks and bonds. And, as added benefit, American Bible Society does not charge the donor any commission or fees for establishing a gift annuity.
American Bible Society offers other planned gift options. For more information about our planned gifts program, please visit our “Contact Us” page to connect with one of our advisors.
